Have you been working from home this financial year?
There are 3 methods you can choose to claim your expenses while working from home, including a new simplified method recently released by the ATO during the Covid-19 crisis.
Note that these methods are for employees who are conducting their employment duties from home, if you are running a business from home, there are other considerations.
- New simplified claim introduced by the ATO specifically for dealing with the number of people working from home during COVID-19
- Claim a tax deduction of $0.80 for each hour you work.
- If you select this method, you cannot claim any other deductions for costs incurred due to working at home. This is all inclusive.
- Verification of time worked can be provided by records such as a diary, timesheet or roster.
Fixed rate method
- Claim a tax deduction of $0.52 for each hour you work. This rate covers electricity, cleaning and office furniture.
- You can additionally claim the work-related proportion of your telephone, internet, consumables and stationery.
- A further claim is available for the decline in value of a PC, laptop or other device.
- Verification of hours worked can be by a diary or other time record. You can keep a diary for a 4-week representative period that can be used for the rest of the year.
Actual cost method
- You will need generally need to have a dedicated work area that is used only for that purpose. If you work from the kitchen table, claims will be minimal.
- You can claim the actual work-related portion of your running costs such as electricity, office furniture, office equipment, phone, internet and cleaning.
- Working out proportional claims can be done in a number of ways, but the ATO require you to keep evidence of these workings. Where any time period is used to demonstrate a pattern of use it must be for a minimum of 4 weeks.
- Claims are also available for all your consumables that are used in your home office, such as stationery and printer ink.
Things you can’t claim
- Tea, coffee, milk and other household items your employer would normally provide.
- Costs that you are reimbursed by your employer for.
- Costs related to children and their education, if it is for online or home schooling.
- Generally, employees can’t claim occupancy costs such as rent, mortgage interest, water or rates.
Temporarily working from home – https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/
Home office expenses – If you are working from home permanently – https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/home-office-expenses/
Running a business from home – https://www.ato.gov.au/General/property/property-used-in-running-a-business/running-your-business-from-home/